Two Exceptions To Permissive Use Car Insurance Coverage

Your car insurance may not cover every person who drives your vehicle on an occasional basis. Members of your household who are most likely to use your vehicle are usually named as drivers on your insurance policy. Some auto insurance policies more generally cover “household members” – but what are the exceptions? Your car insurance policy (buried in the fine print) will define the term “household members.” Typically, this is defined as a person who is related to you through marriage, blood, or by adoption, rather than a roommate or other person sharing your home.

What is Permissive Use?

Permissive use is when a person who is not listed on your policy drives your vehicle. Sounds simple, right? You may assume that it is fine for a friend or visiting relative to use your car, but are you at risk? Not every auto insurance policy will allow for permissive use. The answer lies once again in the fine print of your policy. Before you loan your car to anyone not specifically named on your policy, call your insurance agent and get the facts for your own protection. Permissive use may be allowed, but only up to specific limits.

Exception 1: Business Use of your Vehicle

If a friend or associate borrows your vehicle and uses it for business, it is likely that you are not covered under the terms of your policy. Should that person then cause an accident, there is a risk that you could be held liable. If anyone plans to borrow your vehicle for business use (such as a delivery, visiting a client, attending a work-related function, etc.), it is imperative that you speak with your agent to ensure you have “business use” on your car insurance policy.

Exception 2: Unlicensed or Inexperienced Drivers

If you make the error of loaning your vehicle to an unlicensed driver or a driver who lacks experience, you may not be covered. Insurance companies are careful when issuing policies and want to know the driving record and age of all of those who will be operating the vehicle. Even when permissive use is allowed, if an unlicensed or very inexperienced driver uses your car and causes an accident, there could be trouble.

Get Your Policy Evaluated

Before you decide to loan your vehicle to anyone, ensure that you are actually covered in the event of an accident. We can help you make sense of the terms of your auto insurance policy. Not many people can decipher the legalese in the small print of an insurance policy and we don’t want you to make an error you later regret.